The Portfolio Committee on Transport met with the Transport ministry, the Department of Transport (DoT) and teams from two DoT entities, the Passenger Rail Agency of South Africa (PRASA) and Railway Safety regulator to deal with their Annual Performance Plans (APPs)..
The Minister gave an overview of DoT’s alignment with the Medium Term Strategic Framework (MTSF), the key areas of DoT’s service delivery, its strategic oriented outcome goals, strategies to improve DoT’s key service areas and the bilateral engagements to ensure that DoT developed markets for South African National Roads Agency (SANRAL) in other African counties.
The Department gave an overview of DoT’s revisions its 2015-2020 Strategic Plan; its APP targets for 2018/19; status of Bills; key interventions and the Taxi Recapitalisation Programme (TRP). Other areas included DoT’s risk profile, the structures in place for managing risks and the action plan of DoT to deal with the Auditor-General’s findings; key challenges of DoT and proposed interventions to the key challenges.
Highlights of PRASA’s brief included factors that made rail services the backbone of public transport, the drivers of PRASA corporate plan, alignment of PRASA corporate plan with DoT’s national strategic plan, its medium-term expenditure framework (MTEF) strategic objectives and its budget and capital program.
Highlights of RSR’s were its 2018/19-2022/23 strategic plan and its alignment DoT APP targets, RSR 2018/19 APP, its challenges and proposed mitigation and its MTEF budget.
The Committee asked the Minister questions on filling board and critical positions in entity; status of rural roads and road transport infrastructure in district Municipalities; the taxi recapitalisation program; the user-pay principle on road infrastructure and modernisation of trains and stations.
Questions to the Department focused on DoT’s APP targets, its strategic plans, status of its Bills, the TRP, liquidity ratios of entities, financial mismanagement in entities, empowerment initiatives for previously disadvantaged people, transformation activities of DoT.
The Committee expressed concerns that PRASA’s APP was not yet available, that its Corporate Plan was not signed and expressed concerns that it had to allocate PRASA’s budget when it was not yet satisfied with PRASA’s APP. DoT informed the Committee that PRASA was a Schedule 3b entity and did not need to present a signed corporate plan, but only a signed letter to indicate that the shareholders agreed with its APP. The Committee asked PRASA to present the signed letter showing that its shareholders had agreed with its APP. The Committee also asked PRASA questions on its bursary program; the Umtata, Eastern Cape taxi shut down; its targets and timeframes; its passenger services; turnaround strategies to reduce accidents; train security; the status of new trains, refurbished trains and repairs of signalling equipment; status of its risk management; relationship between RSR and Metrorail; its integration strategies; strategies to fix the challenges on trains and the timeframe needed to bring a turnaround in train services. The Committee also expressed concerns that PRASA corporate plan did not address the targets as the finances for the targets were not available. The Committee asked PRASA to redraft the corporate plan based on financial resources available and the SONA. It also mandated PRASA to engage with the new board to review its targets and provide immediate measures on train timeliness and safety before 7 May 2018 to ensure that the Committee engages with the budget.
The Committee asked the RSR questions on its revised sources of revenue; its permit application fees and technology review fees and safety strategies. The Committee was informed that the RSR Act provided that it could ground trains based on safety reasons but RSR did not fully implement this provision because it would seem to be unresponsive to the plight of commuters. The Committee observed that RSR was in a precarious situation, but remarked that it was important to ensure the trains that were used in South Africa were usable, timely and safe for commuters. The Committee also looked forward to good policies on rail safety regulation from RSR that would impact positively on commuters. The Committee asked RSR to send written reports to the Committee on responses it had not given.
The Chairperson welcomed Members, the Minister, and the team from the Department of Transport (DoT). She remarked that it was the first interaction with the newly appointed Minister, Mr Blade Nzimande. She informed the Minister that the Committee was purpose driven and Members were geared to see that South Africa moved forward because DoT was at the centre of development. The purpose of the meeting was to deal with the Annual Performance Plan (APP) for DoT and its entities. She informed Members that the Minister had requested to leave the meeting early as he had a media briefing on the statistics of accidents during the Easter holidays. She invited Members for comments.
Ms M Khawula (EFF) humbly asked to be provided with a translator?
The Chairperson asked the Committee Secretary to arrange for an IsiZulu interpreter.
Briefing by Minister
The Minister explained that he requested for permission to leave the meeting early because of the media briefing to present the Easter holiday accident statistics. The media briefing had been postponed until after the burial ceremony of Ms Winnie Madikizela-Mandela.
He gave an overview of DoT’s alignment with the Medium Term Strategic Framework (MTSF), the key areas of DoT’s service delivery and its strategic oriented outcome goals. DoT intended to find a strategy to finance road infrastructure and it intends to focus on upgrading road network to assist in job creation and improvement of South African provinces. One of the major challenges to a safe and secure rail system was accidents involving pedestrians and pedestrian bridges that serve as an avenue for crime. DoT has therefore put measures in place to ensure that the rail system would be a safe and secure environment. DoT would be revamping the standard operating procedures (SOPs) on railways and a unit would oversee the SOPs. Apart from these, DoT has put strategies in place for other key service areas such as maritime transport, rural access to infrastructure mobility, green transport and also aims to create more jobs by using citizens as workers in DoT projects. In achieving these, the Department would strengthen its oversight on the transport sector, ensure financial stability of its entities, fill its vacant board positions, fill critical vacant positions and improve departmental internal controls to ensure proper monitoring of accounts. He also said his administration would revisit the Taxi Recapitalisation Program (TRP). He solicited the Committee’s assistance for the country to have a better transport sector.
The Chairperson appreciated the newly appointed Minister and welcomed the Deputy Minister.
The Chairperson invited Members to engage the Minister.
Ms Khawula said that because the Minister would be leaving the Committee she asked he be allowed to respond first.
Mr M Sibande (ANC) proposed that each Member should have three minutes to engage with the Minister.
The Chairperson agreed.
Mr Sibande remarked that the tenure of some board members would soon expire and asked the Minister to speed-up filling up board vacancies at DoT entities. He asked the Minister for an update on repairs of Moloto road and also asked him to address duplication of work in entities which was due to the appointment of consultants. He also asked the Minister to ensure proper monitoring of the activities of DoT staff in provinces.
Mr M Shelembe (NFP) proposed that the Minister should prioritise rural infrastructure in informal settlements such as KwaZulu-Natal as accidents that involve school kids using bakkies (omalume) for learner transport was increasing. He asked the Minister to look into allegations of repaired roads that were still sinking and effectively monitor the development of road transport infrastructure in district municipalities at Vhembe and Nkangala.
Ms Khawula said because the discussion was about road infrastructure improvement especially in rural areas; communities were not consulted when there would be roadwork, how much they would cost and what distance they would cover; even the community liaison officers (CLO) were not taken from the affected communities. There was a road from KwaMaphumulo (Nkantolo) to Glendera where when it rained communities would have to clear paths for their vehicles although municipalities were said to have done road improvements; one could not even see how draining would occur as there were drainage channels next to the road. She thanked the Deputy Minister that she had responded to her complaint about that road and was following up and monitoring the road works programme there. In rural areas road signs were non-existent and there was also a place where taxis no longer could cross the bridge and when she went to the place she had found a service delivery protest. After inquiring she had found that people had planted crops on state property which had not been demarcated visibly and clearly and because there had been no CLO to remind the people of that the crops had been removed which had led to the protests. The Deputy Minister had directed Ms Khawula to a Mr Hlabisa who said the state had allocated resources and given directives to what was supposed to have happened at the place but to date nothing had happened.
There was also the problem of potholes in rural roads all the way to Tongaat. She wished that public transport bakkie drivers’ transporting rural communities could be trained on how to transport communities and how to care for learners and the fact that they drove drunk for learner transport which caused car accidents. They also abused children and children were afraid to tell on the abuse from drivers.
Deaths caused by long distance public transport drivers always killed all involved and when she enquired from drivers why they drove so recklessly the response she received was that they were paid by how many loads they moved in between public transport depots therefore she wanted the DoT to intervene with taxi owners and how they treated their drivers because they hauled family members.
The taxi industry had to be applauded because it employed a lot but she wanted to understand if the DoT was saying no more permits would be given; was there a constitutional provision that quantified how many permits had to be allocated? The issue of permits had to be discussed differently to ensure that those employed there could keep their jobs.
She wished that the traffic deployments that were done on peak holiday’s periods was done more regularly and that DoT could strengthen its own protocols such that traffic officers were not susceptible to bribery.
When DoT saw that the eastern Cape province was defeated in improving road infrastructure the DoT had to intervene because that provinces roads were in extremely bad conditions.
Mr T Mpanza (ANC) said the Minister’s brief gave Members a sense of hope, particularly the strategic objective of filling DoT’s vacant board positions and critical vacant positions. He welcomed the strategic objective of putting in measures to address the triple challenge of poverty, inequality, and unemployment. He supported the Minister on involving the community in the development of the community because citizens destroy government properties because they feel they are not part of the development. He pleaded with the Minister to work with the Committee to ensure that the strategic objectives are met and appealed to the Minister to efficiently monitor DoT entities.
Mr C Hunsinger (DA) apologised for coming in late as he had been attending another meeting. He appreciated the new Minister and said he looked forward to further engagements with him.
The Chairperson said the user-pay principle on road infrastructure should be followed because South Africa needed funds to maintain road infrastructure. Different municipalities had different ways of implementing Bus Rapid Transit (BRT) and she expressed concerns that funds spent were not equivalent to work done. She asked where stakeholders and business sector came on board in the TRP because South Africa could not condone dilapidated taxis on its roads. She applauded the Minister on the appointment of new PRASA board members and expressed happiness that the Minister was addressing vacant slots in the board of DoT entities. Modernisation of trains and stations should be prioritised because train services were used by many vulnerable citizens. She expressed concerns that the number of coaches had been reduced and also said PRASA management needed to provide a safe and secure working environment for service delivery on trains. She said she was pleased that the Minister was revamping the SOPs on railways and that a unit would oversee the SOPs. .
The Minister said he agreed with Mr Sibande that DoT needed to speed-up the appointment of board members in DoT’s entities as the tenure of some board members would soon expire. He informed the Committee that some people had earlier been nominated but he asked the Committee to give him two weeks to go over the nominations. He also agreed with the Chairperson that PRASA management needed to provide a safe and secure working environment for service delivery on trains. The Acting Director-General would give an update on funds allocated to entities. He asked the Committee to assist with learner/scholar transport as the responsibility for learner/scholar transport was not located in the DoT, but with the Department of Basic Education (DBE). DoT would look into maltreated permits received from traffic enforcement officers as alluded to by Ms Khawula. He agreed that the triple challenge of poverty, inequality, and unemployment that arose from train usage by commuters would be addressed. He agreed with the use of user-pay principle on road infrastructure because the people that could afford the tariff needed to pay. He agreed with standardising the implementation of BRT, but remarked that the conditions may not be the same in each municipality. He agreed with Mr Mpanza that community involvement in development of transport infrastructure was important. The S'hamba Sonke program dedicated to road maintenance on secondary roads and rural roads, with particular emphasis on repairing potholes, using labour-intensive methods of construction and maintenance is been closely monitored by the Department. The TRP was important and would be closely followed-up. He had started receiving briefs from the Deputy Minister and the Acting DG on the state of the entities; critical posts that need to be filled and key things are being highlighted to ensure that South Africa has an enduring legacy on transportation. Bilateral engagements were on to ensure that DoT develops markets for South African National Roads Agency (SANRAL) in other African counties.
The Chairperson appreciated the Minister on behalf of the Committee and said the Committee was pleased to engage with the Minister. She hoped that SANRAL and Development Bank of Southern Africa (DBSA) will yield money for the country through the proposed market development plans. She expressed concerns on how South African businesses were made to pay higher rates at toll gates of other Southern African Development Community (SADC) countries compared to what these SADC businesses paid at tolls in South Africa. She asked how DoT dealt with the high gas emissions that came from cars that entered the country from other SADC countries. Overloading affected South African roads hence she asked DoT how it would address the challenges of overloading. She also asked the Minister how DoT would regulate cross border permits mentioned by Ms Khawula. She invited Ms Khawula to engage with the Minister.
Ms Khawula said there had been cooperatives but the problem was that after people started cooperatives, those entrusted to assist cooperatives were nowhere to be found. Even the taxi violence that flared up from time to time was because of taxi permits and if that could be attended to the violence. Why was it that there was free learner transport and transport for those that could not afford in Pietermaritzburg but that was not afforded rural learners?
The Chairperson agreed that the Committee needed to assist DoT to find a way to correct the challenges faced by school kids on the scholar/learner transport in provinces.
Mr Mathabatha Mokonyama, Acting DG, DoT, informed the Committee that he was supposed to assist the Minister with the media briefing and the CFO will answer the Committee’s questions. The new board of PRASA would not be attending the meeting but the executives would be on ground to answer questions.
He said the MTSF targets were reducing because they had been met and the DoT alignment to the MTSF was reflected in the agreement between the President and the Minister. The Single Transport Economic Regulator (STER) Bill had been taken through public participation. There were revisions to DOT’s 2015-2020 Strategic Plan hence the MTSF targets that had been achieved were removed from the 2018/19 APP while the MTSF targets that were not achieved were beng continued. He gave an overview of DoT’s 31 APP targets for 2018/19 they included administration (five), Integrated Transport Planning (four), Rail Transport (four), Road Transport (six), Civil Aviation (five), Maritime Transport (three) and Public Transport (four) respectively. The status of 2018/19 key interventions showed that policies for the National Transport Master Plan (NATMAP) 2050 had been sent to Cabinet for approval but the revised White Paper on National Transport Policy was still been processed. DoT would process the Rail Bill once the rail policy is approved. The roads policy is being processed through the Economic Sector, Employment and Infrastructure Development (ESEID) Cluster and would be up for Cabinet approval soon. As stated by the Minister, the implementation of the S'hamba Sonke program is closely monitored by the DoT. DoT is also processing the access road development plan and monitoring the National Road Strategy. The Air Services Bill is still being processed through the ESEID Cluster. DoT is developing draft curriculum on Civil Aviation in line with the National Aviation Transformation Strategy. DoT gives bursaries to internal staff as training policy but unfortunately not all the graduates can be absorbed after graduation because of lack of vacancies hence some of the graduates are released to serve elsewhere.
DoT is auditing Operation Phakisa projects at seven commercial ports and is continuing with the development of Integrated Public Transport Network Plans at Vhembe and Nkangala district Municipalities. DoT is assisting the taxi industry with financial services through cooperative banks because TRP is not working. DoT is facilitating developments by implementing the Integrated Public Transport Networks in identified cities, but the system would be differentiated because some cities want BRTs, but some did not.
He outlined DoT’s risk profile, the structures in place for managing risks and the action plan of DoT to deal with the Auditor-General’s findings. There were 22 findings; 19 had been resolved while three that related to human resources were partially resolved. The findings resolved were on supply chain management, financial administration eNaTis while the three unresolved findings related to staff not signing performance agreements. He highlighted the key challenges of DoT which were funding and inherent dependence on other spheres of government, other departments and agencies to achieve its targets. He also proposed interventions to the key challenges.
Mr Collins Letsoalo, CFO, DoT, outlined the liquidity ratio of entities under DoT as at the end of the 2017/18 third quarter. The analysis showed that Road Accident Fund (RAF) had a low solvency ratio of 0, 05, a current ratio of 0,3 and high accumulated deficits similarly, PRASA had solvency ratio of 0,99, a current ratio of 3,17 and high accumulated deficits. PRASA’s higher current ratio showed that its assets were higher than its liabilities hence it had a higher liquidity ratio than RAF. DoT was prioritising the Rail Safety Regulator (RSR) for more sustainable modes of funding. He said although the Airports Company of South Africa (ACSA) and Air Traffic and Navigation Services (ATNS) had high accumulated deficits, both entities had the ability to borrow funds by developing a dividend policy. During the 2017/18 and 2018/19 financial years, DoT had consolidated its budget but total expenditure was expected to increase at an average annual rate of 6.3% over the medium term from R59.8 billion in 2017/18 to R69.6 billion in 2020/21. DoT’s expenditure on goods and service and compensation of employees accounted for a projected 2% increase over the Medium Term Expenditure Framework (MTEF) period. This is due to management and program support functions, monitoring and evaluation, grant management and oversight and implementation of policies and development of legislation. He appreciated the Committee for its intervention in increasing the compensation of employees; the increase was used in filling vacant positions. Hence the capped limit was increased to R496.7 million in 2018/19, R534.7 million in 2019/20 and R574.8 million in 2020/21 respectively which was an annual rate increase of 10.1% over the medium term. He highlighted the amounts allocated to transfers and subsidies for entities and said that RSR had been prioritised for sustainable funding. Taxi scrapping had failed because the operators felt the funds given was small hence, operators did not feel it was wise to scrap their vehicles based on the funds released..
Mr M De Freitas (DA) asked for clarity on targets that reduced based on being achieved. He asked for timeframes on the completion of APP targets and the status of Transnet with regards to freights that were charged as rail transport as opposed to road transport. He asked DoT to state the strategies it would use on its revised strategic plans. He asked for the status of Acts such as the Airports Company Amendment Act because the Committee had not had any brief on it. He asked DoT to state the advance plan to absorb staff that graduated under its bursaries. He asked for the difference between the draft curriculum on civil aviation and the existing curriculum. He asked for measures taken by DoT to stop vehicles that were not road worthy to ply the roads of South Africa under the Taxi Recapitalisation Program. He also asked for clarity on liquidity ratios.
Mr G Radebe (ANC) said that there were contradictions in the presentation on Civil Aviation because the Acting DG said the targets were achieved but the report said not achieved. He remarked that staff that did not sign performance agreements were in breach of the agreements of the Public Service Act hence he asked DoT to state what was being done. He expressed concerns on legislations that were not yet enacted because Parliament was about to rise.
Ms S Xego (ANC) expressed concerns that both the Minister and Deputy Minister had left for the media briefing. She expressed concerns that Umtata, Eastern Cape had been shut down due to causes linked to transport even though it initially arose due to safety. She observed that a huge chunk of DoT’s budget was transferred to entities and expressed concerns that some entities did not account for allocated funds hence she advised DoT to monitor its entities closely. She also expressed concerns that schools were closed within the year because of low numbers and this led to scholar transportation challenges as these scholars had to look for other schools and make arrangements for new transportation. She suggested that maybe the DoT had to consider lowering standards on civil aviation to ensure that transformation objectives were implemented.
Mr Hunsinger observed that there were examples of lower competencies in DoT operations despite funding received by the Department. He suggested that DoT should intervene rather than increasing funding. He asked DoT to explain the ways its strategic plans covered the financial indiscipline of PRASA, SANRAL and ACSA. He proposed that DoT should implement consequence management measures in entities to tighten financial mismanagement.
Mr Sibande asked for the status of empowerment initiatives for previously disadvantaged people. DoT’s development of regional market access strategies were not in line with the President’s speech. He expressed concerns that with the increase in fuel prices the RAF and ATNS were still having problems. He asked DoT to state what had been done in filling board vacancies since the Committee had identified the challenges.
Mr Shelembe asked DoT to state the systems it had in place before a bursary is given to ensure that the staff used the skills learnt. He asked how DoT will safeguard the jobs of citizens around the N3 corridor while the road was been upgraded and the proposed new routes was being used.
The Chairperson informed Ms Khawula that her interpreter was now available.
Ms Khawula observed that citizens in rural communities where dying due to poor road infrastructure and dilapidated roads. Hence she asked DoT what measures it was taking to address poor road infrastructure and dilapidated roads. She expressed concerns that independent contractors left piles of sand on the road which caused accidents and advised DoT to monitor the independent contractors’ construction work closely.
Mr Mpanza said the Committee should have been involved in the media briefing on statistics of accidents during the Easter holidays. He proposed that the Committee must meet with the taxi industry on economic empowerment programs such as indabas facilitated through the DoT. He asked DoT to give clarity on the donations captured under transfers and subsidies in the brief.
The Chairperson asked the DoT to indicate the amount that was allocated to women and youth from all sectors to measure if transformation would be addressed.
Mr Letsoalo said DoT could not add to its targets because the MTSF five-year plan limited the targets. Once the STER Bill was approved by Cabinet it would get to the Committee. The road sector is being de-regulated, as alluded by the Chairperson overloading affects roads hence, freights such as logs are being moved to rails and Transnet is being engaged. He said there were different strategies being used in the revised strategic plan which would be sent to the committee in written form. He indicated that most of the amendment Bills were with Cabinet and would soon be discussed in Parliament but the RAF Bill was been prioritised. Trained staff that graduated based on DoT bursary were still placed on lower cadres hence bursary holders do not want to stay ay DoT. The DoT‘s view is that it trains for the industry and not itself. 90% of blacks were not exposed to aviation earlier in life and do not understand the opportunities. In the past, many citizens were not aware of civil aviation programs at matric level hence DoT is introducing programs to create interest of young black learners. The taxi scrapping allowance given under TRP is low hence people prefer to keep their cars. DoT is looking at the cost of the initial vehicle and re-evaluating the program. DoT is looking at ways of giving loans at a developmental interest level to taxi operators. DoT can give the Committee the criteria used to bench mark the financial health of its entities and justify the liquidity ratios. DoT’s felt that the target Bills in the MTSF would have been passed at the end of the administration. Presently, the Bills have gone to Cabinet and after approval the Bills would be presented to the Committee. The performance agreements had not being signed because some staff had issues with it and DoT did not have managers in some offices. Conflicts have arisen in the taxi industry because some emerging routes are more lucrative and this creates problems. The Department is addressing the BRT challenges. Some of the taxi owners who are now shareholders of BRT do not like the idea of waiting for dividends to be ready before they get money as they had been used to daily income in the past so they want to exit the company. He agreed that DoT gives large amounts of its budget to entities and the entities did not account for the funds. Unfortunately, DoT could not collect the funds but only withdraw giving new funds. DoT and DBE need to collaborate through National Treasury on scholar/learner transport. DoT balances the issuance of new operator licenses even when the number of commuters in a certain routes seems to be larger to ensure that the profit margin of the previous operators is not eroded. The Department would not be able to lower standards on civil aviation to achieve transformation objectives but would ensure that previously disadvantaged citizens are enlightened. DoT holds entities accountable based on PFMA rules. DoT has criteria for its transfers but did not interfere on how entities spend the money allocated. He agreed that the PRASA APP was still outstanding and the Minister would hold the new board accountable. He said DoT would furnish information on the Gauteng Freeway Improvement Project (GFIP) through a written document. DoT is presently embarking on consequent management measures on erring entities and would present information on the market access strategy through a written document. RAF only gets 3% of the 30 cents fund increase on fuel hence its low liquidity ratio. The Minister is working on filling vacancies in DoT’s entities and the Department is working on strategies to empower women and youth and the Department signs agreements on bursaries given to its trainees.
Mr Letsoalo said the regional market access strategy could have been done better and agreed that the bench marking was not the best. DoT is presently consulting with stakeholders to improve the regional market access strategy.
Mr Dumisani Ntuli Chief Director: Policy, DoT, said that a tripartite approach was taken on outreach programs and the public transport team was presently working on the TRP to harness economic opportunities in the taxi industry.
Mr Mplokeha Makari, Chief Director, DoT, said the strategic outcomes were part of the Minister’s delivery agreements and DoT would present more details on the strategic outcomes in a written form.
The Chairperson appreciated the DoT and discharged the team. She expressed concerns that PRASA’s APP was not yet available and the Committee would still have to allocate PRASA’s budget. Members needed to be sure that PRASA would be able to account for the funds allocated. She expressed concerns that the Committee had not received any performance report from PRASA since 2017/18 and now the 2018/19 financial year was being concluded. The corporate plan had not being signed by any of the PRASA executives, board chairperson or board members and it had not being signed by the Minister.
Prof John Maluleke, DoT Ministry Representative, PRASA, said the Minister had signed the shareholders compact and did not need to sign the corporate plan.
The Chairperson asked why the corporate plan had not being signed and the PRASA APP was not available.
Mr Jomo Khasu, Parliamentary Liaison Officer, DoT, said he was not able to say why the corporate plan had not being signed and the PRASA APP was not available. The Minister had requested on behalf of SAMSA and SANRAL that their APPs would be submitted late. The unsigned corporate plan could be a copy sent in haste to Parliament and only the PRASA officials could ascertain if the copy presented was the final copy. He said he was not sure about the legal implications but it might not be proper to engage an unsigned document.
The Chairperson said the document became a public document once it had been tabled at Parliament. She asked for the Committee’s Content Adviser, Adv Norma Nel’s comments.
Adv Nel said this was not the first time PRASA was presenting an unsigned document and the Committee could not be sure that the shareholders compact was signed as well. She said if the corporate plan was not signed it would not be technically right and Members might not be comfortable with engaging on the document.
The Chairperson invited PRASA to respond.
Dr Sipho Sithole, Group Chief Strategist, PRASA, said PRASA had never had any requirement to sign its corporate plan but it had signed shareholders compact.
Prof John Maluleke said PRASA was a Schedule 3b entity hence it was not required by law to sign or certify its corporate plan. PRASA Board only needs to prove that it approves the corporate plan which is evidenced by a letter from the board that can be submitted to the Committee.
Mr Sibande said he did not know the procedure but DoT should have informed the Committee before the meeting. He expressed concerns that the past PRASA Board had earlier informed the Committee that the executive management had not discussed with it in a previous meeting with the Committee. If PRASA had made a mistake it should not expose itself.
Mr Radebe proposed that the Committee should allow PRASA to present but note the corporate error and mandate PRASA to submit a signed corporate plan to the Committee.
The Chairperson asked Members if they agreed to engage on the unsigned document to ensure that the document became public.
Mr Lindezikhaya Zide, Acting Group CEO, PRASA, said PRASA must go by what the law referred to, the law only required signed letters by PRASA and not a signed corporate plan.
Adv Nel said she observed that in the past PRASA had always submitted unsigned corporate plan documents but since the Committee did not have any APP from PRASA it needed to submit a signed copy of its submitted corporate plan to the Committee
Mr Mokonyama said National Treasury had a template for APPs and an APP had to be signed while a corporate plan did not necessarily have to be signed.
Mr Letsoalo said DoT agreed with the Committee if it said that PRASA needed to present a signed corporate plan but the Committee should note that entities were different; signing of a corporate plan did not apply to it since it was a Schedule 3b entity. The Committee must propose that although a signed corporate plan was not a requirement for a Schedule 3b entity but based on the past experience of the Committee with PRASA it required a signed corporate plan.
The Chairperson requested that PRASA should submit the letter that showed that the board approved the corporate plan to the Committee.
Mr Mokonyama said the board had just been approved on 12 April 2018 and the board could not attend the meeting until after its induction.
Briefing by PRASA
Dr Sithole said rail transport was the backbone of public transport which should respond to urbanisation. He outlined the benefits of rail transport, the way rail transport responded to the national development plan, how the PRASA corporate plan aligned with the DoT’s national strategic plan and the MTSF. He highlighted the prioritised list of rail service and network interventions and the context of the corporate plan. He gave an overview of the board oversight and performance monitoring objectives and the six MTEF strategic objectives which the board used to measure PRASA’s achievements. He informed the Committee that the present customer satisfaction rating of PRASA based on a survey was 59.49% and this was projected to increase in the next few years. He agreed that the statistics on rail operations had decreased but he informed the Committee that projected increases were expected based on the improvement strategies of PRASA. Rail engineering was crucial to ensure the availability, reliability and safety of rolling structure and infrastructure and outlined the various measures to achieve the objective. He mentioned the key programs to achieve the six objectives targets of PRASA for 2018/19.
Ms Thobela, Acting CFO, PRASA, said PRASA was faced with cost challenges, VAT increases and an operating estimated operating cash shortfall. She PRASA’s major costs were personnel costs (49%), energy (9%), municipality (4%), maintenance (6%) and insurance claims (4%). She also outlined PRASA revenue and capital allocation.
Mr Hunsinger said PRASA had a couple of encouraging measures to improve the services of the entity. PRASA had offered target ranges on its strategic objectives but he asked PRASA to state its fixed targets and timeframes to achieve the target. Mainline passenger services decreased by 34%, but Dr Sithole said it would increase by 25-50%.hence he asked why PRASA had the 34% decrease and strategies it would use to increase mainline passenger by 25-50% in subsequent years. He asked PRASA to state its contingency plans on suspensions in passenger services and turnaround strategies to have less challenges on safety on trains. He asked for the target that sought to reduce accidents linked to staff error as the RSR indicated that accidents occurred due to the errors of staff that were not trained appropriately.
Ms Khawula advised PRASA to beef up security with the use of law enforcement agents in trains to avoid crime. She also proposed that PRASA involve law enforcement agents to stop the activities of scrap yard entrepreneurs, because it led to vandalism. She also advised PRASA to ensure that safe abortion stickers were removed from trains because the stickers were disgusting.
The Chairperson agreed with Ms Khawula that the stickers on safe abortion were disgusting and remarked that the stickers were also on billboards and street lights.
Mr Sibande said he expected PRASA to give statistics on new trains purchased, the trains refurbished and the status of repairs of signalling equipment because funds had been released to address these issues. He asked PRASA to state the status of its risk management and he asked for clarity on board oversight performance monitoring. He wanted an update on the funds it allocated to Metrorail for hiring security and expressed concerns that trains did not keep time. He asked for the relationship between RSR and Metrorail. RSR had reported that accidents occurred because of lack of signalling equipment’s and asked for measures by PRASA to address the lack of signalling equipment and how PRASA communicated lateness of trains to commuters.
Mr Mpanza said although the presentation was good, he did not see anything new because the challenges were not new. The PRASA brief had not given strategies to fix the challenges and the timeframe needed to bring a turnaround. The presentation was not addressing the targets as the finances for the targets were not available. He suggested that PRASA goes back to redraft the plan based on financial resources available.
The Chairperson asked PRASA if Mr Mpanza’s proposal could be achieved. The President had addressed rolling stock issues in his SONA and she asked PRASA to scale down on its targets in line with SONA. PRASA was trying to address modernisation without dealing with vandalism and was not apportioning funds for maintenance.
Mr De Freitas agreed with his colleagues that PRASA needed a turnaround strategy and observed that the plans highlighted by PRASA were future plans that did not address the challenges that were faced by commuters that had to board a train the next day. It was not impressive for PRASA to have shining new trains; PRASA had to ensure that the trains were on time and signalling equipment was working efficiently. The proposed growth in mainline passenger services would happen if trains were clean, efficient and timely and if PRASA works efficiently. PRASA should go back and redraft practical steps to ensure that commuters enjoyed good service delivery now rather than in five years’ time. He asked PRASA to state the challenges it had with integrating with other entities on development and commercialisation. He asked for updates on integration with Transnet.
Mr Radebe asked PRASA how it planned to increase the fare revenue of Metrorail, MLPS and Autopax by R1.5 billion between 207/18 and 2018/19 financial years, He asked for clarity on stability and sustainability ratios and clarity on relationships between DoT and Department of Trade and Industry (DTI) on localisation of industries.
Mr Hunsinger asked why PRASA did not have any reports on its subsidiaries Autopax and Intersite.
The Chairperson agreed with Mr Hunsinger that PRASA needed to give reports on its subsidiaries to ensure that the Committee engages and carries out oversight functions on them. She asked for an update on PRASA’s interaction with Transnet. When PRASA did not meet its commitments to train commuters, these vulnerable workers had to make other arrangements outside train tickets purchased which was frustrating and led to vandalism.She did not see how the PRASA survey alluded by Dr S Sithole could produce results of 59.49% satisfaction because challenges on trains happens in other provinces apart from Western Cape. She advised PRASA to communicate why trains do not move because vulnerable workers who are train commuters would vandalise trains when they got to work late and lost jobs. The Committee insisted that PRASA visited dilapidated and vandalised train sites at Salt River, Parkway and other stations to be aware of how many trains need refurbishment and repairs. She mandated PRASA to assist Metrorail with the maintenance of the dilapidated and vandalised trains in these stations. She invited Mr Zide to state PRASA’s quick intervention plans for challenges faced by train commuters.
Mr Zide said PRASA was meeting with RSR on 18 April 2018 to discuss contingency plans on prohibition directives and would communicate to the Committee on the way forward after the engagements. The training plans would be presented to the Committee as soon as it is finalised. PRASA would provide the status of the re-integration of railway police and law enforcement officers on trains to the Committee in a written report. Also, PRASA progress reports on raids to scrap dealers would be presented to the Committee. PRASA is challenged with getting deployments of police officers to raid scrap yards and prosecute suspects. PRASA had information on cooperatives that had been employed by CRES, the facility management arm of PRASA to clean its stations and the information would be presented to the Committee in written format. PRASA’s safety plans would be presented to the Committee in written reports. PRASA executives welcomed the appointment of its new board members but would have liked their tenures to be at least three years as interim appointments have affected PRASA operations in the past. He promised to provide the Committee with reports to account for funds allocated and the targets on service delivery that had been achieved. PRASA would also present reports on its risk management profile and report on the impact of using drones as a security measure for train facilities and infrastructure. The relationship between PRASA and RSR had been affected by interim board appointments. He agreed with Mr Mpanza that the corporate plan needed to be redrafted to ensure it focuses on meeting specific targets that could be achieved. PRASA would present a report on the rolling stock after engagements with the new board. He said he would present the Committee feedback on concerns on action plans needed to revamp the present rail service delivery challenges after presenting the new board with the recommendations of PRASA’s executives. Integration of PRASA and Transnet is challenged by debt owed, PRASA is negotiating on the debts owed but some of the debt is due to government policies. PRASA relates with DTI and would submit reports on localisation of industries to the Committee in written form. He agreed that PRASA’s corporate plan did not prominently feature reports on its subsidiaries Autopax and Intersite and promised to facilitate engagements with both subsidiaries. PRASA has started implementing new measures to correctly communicate with its commuters and is looking at measures to refurbish dilapidated trains in its stations and modernisation strategies which would be presented to the Committee in written format.
Mr Mokonyama said the corporate plan would be presented to the new board in the first week of May 2018 to review the targets in line with SONA and financial resources available as stated by Mr Zide. He requested that the Committee give PRASA executives the opportunity to engage with the new board and represent after reviewing its targets. The strategic plan for immediate measures on timeliness was delayed because the executive needed to present the plans to the new board.
The Chairperson mandated PRASA to engage with the new board on review of targets and immediate measures on timeliness before 7 May 2018 to ensure that the Committee engages with the budget. The Committee was at the receiving end because communities and commuters interact with them on daily basis hence it had more stress compared to PRASA’s executive management.
The Chairperson discharged PRASA and apologised to RSR for behind schedule. She informed RSR that the Committee was receiving briefs from DoT entities on APPs and strategic plans. The Committee expects that RSR needs to elevate its mandate of regulating safety on rails.
Briefing by RSR
Ms Nomusa Qunta, Chairperson, RSR, said that RSR had met with the new Minister on safety on rails and have received new directives.
Ms Tsepo Kgare, Acting CEO, said her brief would be on RSR’s strategic plan for 208/19 - 2022/23 and alignment to DoT’s annual performance target, RSR’s 2018/18 APP, its challenges and mitigation and the MTEF budget. She outlined RSR safety assurance framework, its operating model, its risk based regulations approach and how it accessed its risks. The risks identified were high levels of safety related vacancies, work load planning challenges, missing core competencies, lack of risk assessments and interface agreements. RSR assists the operator by using a safety management system wheel which examines key safety factors in the operations of the operator. RSR’s APP has been developed to achieve strategic outcomes such as, safer railways; sustainable institutional growth and development and improved stakeholder service. High risk operators had been encouraged to sign safety performance agreements, a safety risk model had been developed and a draft determination of occurrence reporting had been developed for public complaints. The challenges of RSR are a R40 million deficit in fourth quarter of 2017/18, human resources instability, and the impact of decentralisation on RSR operations in 2013/14, increased operational expenses and lack of variable revenue from technology reviews and Africa business which affected RSR budget. Mitigation measures are based on a financial recovery plan and maintaining compensation on employees (COE) below 60% threshold of the reduced total revenue budget. The strategic risks of RSR are possible industrial action by its staff and loss of key personnel due to COE interventions, under recovery of Technology Review in 2018/19 due to ongoing disputes by operators and expiry of related regulation in September 2018, fixed revenues and retrenchments. .
Mr Hermanns, CFO, RSR, said the MTEF budget had been revised to take into account the current challenges faced by RSR.He outlined the revised sources of revenue for the MTEF budget. The APP cost apportioned for each outcome were safer railways (47%); sustainable institutional growth (4%) and development and improved stakeholder relations (5%) of RSR’s budget respectively.
Mr Mpanza asked if the Acting CEO was confident that RSR would achieve its targets with all the serous budget challenges and staff instabilities. He also asked her how RSR would manage because RSR’s mandate to regulate sensitive entities such as PRASA was critical.
Mr Hunsinger asked for clarity on the term ‘revenue from offensive stream’ under the revised sources of revenue for the MTEF budget. He asked for updates on permit application and technology review fees. He asked why there was a projected rise of 31% on office rentals and he asked for clarity on the strategies in place to avert incidents on road and railway crossings. He asked for measures in place for keeping good records and addressing findings. He asked for RSR’s professional opinion on safety on trains as train accidents had increased in previously.
Mr Shelembe asked why the time frame to publish the draft industry national protocol for verbal safety critical communication would be 31 March 2019. He also expressed concerns on why the time frame on awareness efforts to promote safe railway behaviour would be 31 March 2019. He asked for clarity on reducing expenditure for professional fees and clarity on reducing vacancies.
Ms Xego expressed concerns that the awareness efforts to promote safe railway behaviour through education, communication and training initiatives did not involve communities. She was worried about mushrooming communities that developed along railway lines. She asked RSR to state the party that receives the reports on investigation of incidents the community or operator. She asked if RSR was allowed to ground trains that are not safe based on its mandates. She advised RSR to develop its permit fee model in a way that it would not require advances.
Ms Khawula asked RSR to state measures used to stop electrocution and fatal accidents that could lead to deaths inside the train. She asked who was held liable for train collisions and its recommendation for passengers that need to chain trains due to platform changes as this could lead to stampedes. She also asked for RSR’s recommendations on security on trains.
Ms Qunta said RSR would not entertain situations where targets would not be met. The brief was given to ensure that RSR was transparent about its affairs and it is working in terms of its mandate to rise above its challenges. She remarked that when an entity has made past errors it takes time to get the entity revamped but she assured the Committee that RSR was working on the situation.
Ms Kgare said the Chairperson had assured the Committee that it would work with management to ensure that targets are achieved despite the finances available. The term ‘offensive regulatory fees’ was used because RSR expected that revenue from technology review fees will be reduced - RSR will stop investing in big infrastructure projects. The challenge is the inability of RSR to collect these amounts from operators. In the past RSR had overestimated application fees but has now brought it to a realistic figure. Staff retrenchment is not the best option but RSR might need to consider that avenue if all efforts fail to get the entity revamped. Level crossing incidents and overcrowding incidents on trains are due to poor management by the operator and RSR is focussing on strategies to assist operators to avoid both incidents. Train incidents involving people are due to mushrooming communities. In the past PRASA constructed fences but this led to restrictions between communities that live on both sides. RSR has undertaken community awareness through education to address these challenges in the past through NG’s that operate with commuters. The reports from NGOs show that RSR did not understand the living experiences of commuters hence RSR is working with communities to provide solutions. The party that takes liability for train incidents depend on the results of the investigation. RSR is focussing on developing protocols for communication; the present communication style is not professional. Other train incidents occur due to collisions and the liability can be attributed to the operator however some operators feel that it is cheaper to pay penalties than to stop trains from operating. The challenge is that if RSR withdraws the permit of PRASA commuters would be impacted negatively.
Ms Qunta said the Act provides that RSR can ground trains but RSR did not want to seem to be unresponsive to the plight of commuters as this would put the new Minister on the spotlight.
The Chairperson remarked that it was a precarious situation and asked the Acting CEO to wrap-up because she had been informed that the taxi to convey support staff home was waiting. RSR could send written reports to the Committee if it could not complete the responses.
Ms Kgare said RSR carried out a maturity test to ascertain safety on Metrorail and Metrorail systems failed the test. The two present cost drivers of RSR are leases and cost of employment and presently RSR is not able to fill some vacancies. National Treasury has said compensation on employees should be reduced to 40% of costs, RSR is trying to reduce it to 60% but it would lead to redundancies at some point.
Mr Hermanns said RSR had revised its budget based on National Treasury estimates. The report on professional fees and financial administration would be presented to the Committee after it is completed..
The Chairperson said it was important to ensure the trains that are used in South Africa are usable, trains keep to time and commuters are safe. The Committee looked forward to good policies on rail safety regulation from RSR that would impact positively on commuters.
The meeting was adjourned.
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